Economic analysis

Pomeg-Tech Ltd. considers an economic profitability analysis to be a prior condition to any investment in the pomegranate business. Hence, the company offers its customers this service as part of the package: initially, i.e. prior to the main investment in an orchard, and later, before making decisions at each key phase, including post-harvest treatment and cold storage of the fruits, aril extraction, juice production and marketing.

Even before the customer enters into a serious investment, Pomeg-Tech experts, at the customer's request will evaluate the physical conditions such as climate, soil and water etc. and perform a comprehensive pre-feasibility analysis, including the potential profitability of the enterprise. The company can also offer a preliminary marketing prognosis and discuss the potential market opportunities (see Marketing), and offer recommendations as to the most desirable varieties to plant.

A model economic analysis for demonstration (see DEMO presentation) is based on the experience of Pomeg-Tech experts in Israel and other countries. It relates to a 100 hectare (ha) plantation. This DEMO considers the key elements of a venture, based on as realistic assumptions as possible. It offers potential investors a feeling for what may be in store for them if they enter the industry.

In each analysis Pomeg-Tech calculates a series of standard profitability parameters: (a) The cumulative Net Present Value; (b) The ‘year of return of the investment’ and (c) the Internal Rate of Return (IRR). Generally these disclose that the pomegranate industry can be very profitable. The analysis also examines the project's sensitivity to fluctuations in price and yield.

Later, once the client has commenced operations, production costs, expected yields and farm-gate prices are estimated, both for the investment period [the first two years] and for the later fruit bearing years. The estimated profitability is based on the assumption that the investor will employ an advanced agro-technology that will produce above average yields of high quality fruit. Our experts perform these analyses at the client's request in relation to the specific economic environment affecting his investment.